India records highest peak power deficit in 16 months

During the month, power generation, excluding from renewable sources, increased 4.5 per cent to 102 Billion Units (BUs). The improved thermal demand was on account of lower generation from other sources, including hydro, nuclear and wind.Sudheer Singh | ETEnergyWorld | October 31, 2017, 15:40 IST

New Delhi: Higher electricity demand coupled with supply constraints led to India recording a peak time power deficit of 2 per cent in September – highest since April 2016 when the gap between demand and supply stood at 2.1 per cent – according to research and ratings agency India Ratings.

During the month, power generation, excluding from renewable sources, increased 4.5 per cent to 102 Billion Units (BUs). The improved thermal demand was on account of lower generation from other sources, including hydro, nuclear and wind.

“Peak demand deficit increased in the Northern region due to a shortage of supply in Uttar Pradesh,” India Ratings said in a report today. The higher demand and lower supply witnessed in the non-thermal segment also pushed up short-term power prices at the power exchanges.

“Short-term power prices exceeded Rs 4 per unit. In September 2017, the difference in the total buy and sell bids at Indian Energy Exchange (IEX) turned positive, indicating a higher demand for short-term power,” the report said. However, the spike in spot power prices at the exchanges are not likely to sustain in the medium term in light of a significant amount of spare capacity and the inability of generators to tie-up long-term power purchase agreements.

India Ratings also said coal inventory levels at power plants declined in September due to a sudden rise in electricity generation from thermal plants amid limited coal output and supply. “The overall level stood at 8.5 million tonnes in September 2017 from 11.9 MT in August and 16.7 MT in July. The number of plants with critical and supercritical levels also increased to 21 in September from 12 in August and 2 in July.

Coal India’s production in September rose 10 per cent year-on-year. However, the increase was lower on a month-on-month basis at 3 per cent. Coal India has increased its supplies to improve the coal situation at power plants. During the month, the growth in coal supply to power plants was 21 per cent at 35.1 MT compared with 29.1 MT in September 2016.

“To save the environment and to fight climate change, my government has planned a major campaign. By 2022, we want to generate 175 GW of renewable energy. In the last three years, we have already achieved 60 GW or around one-third of this target,” he said.